Here's a post from AOL that might be of interest followed by one that I posted there concerning the Monday meeting as well as my answer to the question of how it was that a small company like MED/AIPN got such a potentially valuable concession instead of an Exxon, for example....
Subj: clearing up a few things
Date: 97-07-24 20:33:31 EDT
From: Mir p 62
would like to address a few of the posts going back and forth here..first all of you know my opinion on the stock..I do believe it is a 30 - 50 dollar stock once we go from potential to proven and probably a 10 - 20 dollar stock even before a well is drilled if they sign a major partner..that said I think any of you expecting a major to be announced at Mondays meeting are pushing things a bit..I do believe we could hear things about the refinery by then and also a few more analyst reports giving even greater valuations than the one we heard yesterday from Robert M Cohen..also there are people commenting on the movements of marketmakers in the stock..whoever is making these posts are reading much to much into this..true market makers move to make their trades for the day but a majority of them are working real orders for the stock..with the volume remaining fairly heavy these mm dont have as much influence as a lot of people believe..the meeting Monday is really a forum for AIPN to explain the reality of the Kazakstan fields and to answer any and all question from its supporters or detractors..there will be money managers,brokers,analysts and shareholders there..I also believe that following the meeting those who attend(myself included) will be more bullish on the prospects of the company..the parnership possibilites will be discussed but I think expecting a partnership to be announced is too much to ask given the fact that major oil co. just dont move that quickly..I hope I am wrong ..either way..the stock is going much higher in the short and long term..good luck..feel free to e mail me if you want,,
Subj: Re:AIPN......
Date: 97-07-25 09:25:33 EDT
From: Bouhafa
... Mir, I agree with you that it is a bit premature to expect an announcement of a partnership on Monday. While it seems to be true that AIPN has been in contact with major producers for some time (those household names), I was told that the company did not want to enter into serious talks until the license was officially transferred to MED by the Kazakstan government. Now that that has happened, the talks have taken on a more substantive character.
The meeting on Monday will answer a lot of the questions that have been raised concerning the value of the potential reserves to AIPN, the status of testing in the 40% of the License Area that has yet to be evaluated, the specifics as to what kind of deal AIPN/MED hope to make with an eventual partner, the status of financial arrangements with the government of Kazakstan, the status of the refinery expected to go on-line in a couple of months, the revenue potential of that plant and its relationship to the provision of cash flow to the Kazakstan project, etc.
That said, there is one major announcement that I do expect: look for confirmation that a sample taken from the blowout well before it was sealed turned out to be "31 gravity" crude. If that fact is confirmed by the company it will lend strong credence to their claim "that this structure...could provide the largest potential deposit in the License Area". When I first read that statement by the company in the July 10 press release, I asked myself the obvious question: how could they make such a claim if they have not yet performed seismic or other testing on the structure? Well, I did a little digging and, eventually, heard the story about the "31 gravity" sample from three different sources. Why the company has shared this information privately with some important individuals but not in a public press release is a bit of a mystery to me. So, that's the story I'm looking for. If we get it, it will have a significant impact on the company's prospects.
One question that I do not expect to be fully answered is the following: how did a small entity like MED/AIPN seemingly outmanoeuver the industry giants in getting this valuable concession from the Kazakstan government? There will be an answer but I doubt that it will be thorough, though I will not fault the company for being less than candid on this matter. Here's why?
I've been told that many of the oil companies in the Caspian area started doing business there many years ago. I believe EXXON began exploring as far back as 1972. So, it is likely that many of the oil companies were in the area prior to the break-up of the Soviet Union. It is also likely that they struck deals with the inefficient Soviet government that largely favored their interests. Oil companies have never been known for their sensitivity to the culture or financial interests of the developing world. Their image has generally been one of arrogant exploiters of natural resources with little regard for the economic interests of the country being exploited outside of, perhaps, a small ruling clique of elites. It must have been easy to strike deals like that in the Soviet Union.
After the collapse of the Soviet Union, new regional governments emerged in an, albeit imperfect, democratic context. Corruption certainly did not dissappear but now there were new players many of whom were eager to assert their new-found national identity. Kazakstan was one of those new countries governed by new people with a new agenda...one of which had to be a restoration of balance between the economic interests of the new country with the economic interests of , in this case, the foreign oil companies.
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The key to my theory is the fact that MED Shipping includes a number of Kazak nationals (businessmen) with strong ties to officials in the Kazak government which is keenly aware of the fact that they are sitting on possibly one of the largest oil fields in the world. This time, however, the Kazaks decide to be in the driver's seat so that they can strike a more favorable and probably less-exploitive deal with the foreign oil companies. MED Shipping, partly owned by Kazaks, suddenly emerges as the main contender for a concession that the government is certain contains valuable oil reserves (remember my earlier reference to the "31 gravity" sample from the blowout well drilled by the Kazak government). Do they want to give this concession away to the Exxon's of the world at less than favorable terms as the Soviet government probably once did. I think not. This time they were going to do it differently but they still needed a partner capable of managing the project. Enter AIPN. Why little AIPN? For one thing, AIPN had the experience to handle the basics (a major producer would, of course, be needed later in the game). As important, however, was the fact that the Kazaks could do a deal that would give them a lot of low-priced stock that they knew would appreciate significantly once the world realized that this field was the real thing. The government would profit from royalties, their friends at MED would profit from the appreciation of their equity interest in the company, and between them they would be able to negotiate from strength with the majors. Unless one chooses to believe that the newly-nationalistic Kazak government would intentionally defraud a company composed, in part, of prominent Kazac business personalities by selling it a worthless concession, you have to believe that a little nepotism,national pride, and economic opportunism are at work here...all of which should, in the end, make AIPN shareholders very happy.
So there's my theory...and it is only that. While it may not be entirely accurate I suspect that it, at least, contains some elements of truth. Comments would be welcome.Thank you.
Cheers...Faris |
